You missed the maturity date. The next 120 days matter most.
By Brad Beattie, Director, Capital Markets, Janover Capital LLC · Published · Updated
If a CMBS balloon goes unpaid, a signed refinancing commitment or a signed sale contract that closes within 120 days can keep the loan with the master servicer while the deal closes. Close inside that window and, in BANK5 2025-5YR14, the special servicer takes no liquidation fee and no workout fee on the balloon. Miss it, and the loan transfers, the appraisal clock starts, and the costs climb.
What to have in hand on the maturity date
The agreement asks for a written and fully executed refinancing commitment or purchase and sale agreement, delivered to the servicer, providing for the refinancing or sale to occur within 120 days after the balloon was due. A term sheet or a letter of interest is not that document. A lender's signed commitment is.
- Day 0: Maturity: the balloon is due. If you have delivered a signed refinancing commitment or a signed sale contract that closes within 120 days, the loan can stay with the master servicer while it closes. Without one, the missed balloon is a Servicing Transfer Event at once. (PSA 1.01, "Servicing Transfer Event" (i))
- Day 1: Reported past maturity. The filing shows payment status code 4 (matured, still paying) or 5 (matured, not paying). (Schedule AL, paymentStatusLoanCode)
- Day 90: Appraisal Reduction Event (day 120 if a deal is pending). Ninety days after the missed balloon, an appraisal is triggered, unless a refinancing or sale is expected within 120 days of maturity, in which case it waits until day 120. (PSA 1.01, "Appraisal Reduction Event" (vi))
- Day 120: The 120-day line. If the loan went to the special servicer only for the missed balloon or a missed payment, and it is refinanced or repaid in full within 120 days of maturity, the special servicer takes no liquidation fee and no workout fee on it. After day 120 the refi or sale deadline is gone and the loan transfers if it has not already. (PSA 1.01, "Liquidation Fee" proviso (e); "Workout Fee Rate" (ii); "Servicing Transfer Event" (i))
If there is no commitment by maturity
The loan goes to the special servicer immediately. From there the realistic paths are a short extension or forbearance negotiated with the special servicer, a refinance that pays the loan in full, a sale, a discounted payoff, or a foreclosure. Extensions and other changes are major decisions that the junior bondholders' representative can block while it holds control. What a servicer is allowed to change, and what happens in special servicing.
Start before the date, not after it
Many conduit loans open to prepayment at par a few months before maturity. In BMO 2026-C15, a conduit deal from August 2026, the open period ran 2 to 7 monthly payments. That window and the 120 days after maturity are the time you have to close a refinance without paying a premium or a special servicer's fee on the balloon. A loan that cannot be refinanced for the full balance needs equity, a partner, or a negotiated paydown, and those take longer to arrange than a plain refinance.
If the maturity is still ahead of you, read when a CMBS loan is maturing and refinancing a CMBS loan, then get a CMBS quote early enough to have a signed commitment by the date. The servicer clock shows the balloon track day by day.
Sources: Pooling and Servicing Agreement, dated as of April 1, 2025 (BANK5 2025-5YR14), section 1.01 definitions of "Servicing Transfer Event", "Appraisal Reduction Event", "Liquidation Fee" and "Workout Fee Rate"; BMO 2026-C15 prospectus, filed August 18, 2026.
Questions people ask
Is a term sheet enough to keep my loan with the master servicer?
No. In BANK5 2025-5YR14 the servicer needs a written and fully executed refinancing commitment, subject only to customary closing conditions, or a signed purchase and sale agreement, delivered by the maturity date and providing for closing within 120 days. A term sheet or letter of interest is not that document.
What if the refinance does not close within 120 days?
The loan transfers to the special servicer immediately. It also transfers at once if the master servicer has to advance a payment before the refinance or sale closes. After the transfer, a longer extension or forbearance has to be negotiated with the special servicer.
Can a CMBS loan be extended past the 120 days?
Yes, by modification through the special servicer, as a Major Decision the controlling bondholder can block while it holds control, and within the agreement's outer limits. The extension guide sets out what that takes.
Does the no-fee rule cover a discounted payoff?
No. The exception applies when the loan is refinanced or otherwise repaid in full within 120 days of maturity, and only if it went to special servicing just for the missed balloon or a missed payment. A discounted payoff pays the 1% liquidation fee.
Maturity coming up without a lender?
Send the loan to Janover Capital to talk through a refinance before the window closes.